创意现实 (CREX) 2026财年第二季度业绩电话会：营收大增65%，预计下半年创纪录

核心要点

• 2026财年第二季度营收同比增长65%至2150万美元，其中CDM贡献了740万美元。传统CRI业务营收增长约8%。
• 毛利润从500万美元增至830万美元，毛利率基本维持稳定，为38.6%，去年同期为38.5%。
• 调整后EBITDA由2025财年第二季度的110万美元以及2026财年第一季度的49.4万美元亏损改善至200万美元。然而，归属于普通股股东的净亏损扩大至460万美元，即每股稀释亏损0.43美元。
• 年度可重复性收入（ARR）年化运行率达到2050万美元，高于上一季度的2010万美元。管理层预计，约400万美元的种子SaaS和ARR积压订单将在2027年初开始产生贡献。
• 管理层预计第三季度营收将大幅超过2025财年第四季度创下的2390万美元的前季度纪录，随后在2026财年第四季度实现又一次显著的环比增长。
• CRI已实现约750万美元（占75%）的年化CDM协同效应目标（目标至少为1000万美元）。此外，该公司通过最近的增发股票加强了流动性，从而消除了持续经营疑虑。

关键财务数据

业务与经营业绩

在CDM服务销售额700万美元以及传统CRI安装业务增长的推动下，服务营收增长了一倍以上，达到1400万美元。硬件营收小幅增长至750万美元。

受营收组合影响，硬件毛利率从25.1%降至17.2%。服务毛利率从54.4%降至50.1%，主要由于高毛利客户合同在2025年到期。

CDM的大部分整合工作已经完成。销售和营销费用由120万美元增至200万美元，其中包含来自CDM的约50万美元。一般及行政费用由520万美元增至900万美元，其中CDM贡献了380万美元。传统CRI的一般及行政费用同比减少约40万美元。

CRI表示，价值850万美元的田纳西泰坦队及新日产体育场项目按计划推进，预计大部分营收将在2026年实现。该项目部署包括数千台显示屏和完整的IPTV解决方案。

Albertsons被确认为CRI此前宣布的零售媒体网络客户。截至电话会议召开时，分布在220至250个试点的约3000块屏幕已完成改造，该网络每天投放约100万条广告。Albertsons正在使用CRI的CMS和广告技术软件栈。

CRI已完成AMC影院的测试试点，并正向全美约285家门店的全面部署推进。该公司还在与一家拥有900多家门店的全国性移动通信零售商以及一家拥有1000多家门店的快餐连锁企业进行谈判。这些平台转换预计将对2027年的SaaS营收形成支撑。

该公司还正在将加拿大约300家雷克萨斯和丰田经销商迁移至其CMS平台。管理层预计，该合作每年将带来数十万美元的SaaS和创意服务营收。

管理层业绩指引

管理层预计2026财年第三季度将成为CRI营收最高的季度，大幅超过2025财年第四季度报告的2390万美元。管理层还预计2026财年第四季度的营收将显著高于第三季度。

预计第三季度硬件营收占比将更高，这主要是受田纳西泰坦队安装项目的推动。到了第四季度，随着CDM庞大的媒体营收基础上线，营收组合预计将回落至接近第二季度的水平。

管理层预计下半年的综合毛利率将出现环比改善。硬件毛利率可能在整个2026年持续承压，预计到2027年将迎来进一步缓解。随着SaaS营收的扩大，公司的目标是将毛利率拉回40%以上，不过管理层表示2026年不太可能达到这一水平。

在营收增长和成本举措的支撑下，预计下半年调整后EBITDA及相关现金流将有所改善。CRI仍有望实现至少1000万美元的年化CDM协同效应，其中约750万美元已在年化运行率层面落地。

风险与关注事项

• 尽管营收和调整后EBITDA有所增加，但归属于普通股股东的净亏损仍扩大至460万美元。
• 受到产品组合和通胀的影响，硬件毛利率依然承压，管理层预计要到2027年才会出现实质性复苏。
• 由于陷入困境的竞争对手试图挽留业务，服务定价面临一定的下行压力。
• 服务毛利率受到了高毛利合同到期的影响。
• 季末债务增加至4660万美元。去杠杆化在一定程度上取决于未来能否产生正向经营现金流。
• 已签约项目的部署进展、平台转换的时机与贡献，以及预期的SaaS营收，对下半年及2027年的前景展望依然至关重要。

分析师问答亮点

管理层表示，Albertsons的部署巩固了CRI在零售媒体网络领域的地位，并可能加速其项目储备。公司提到Albertsons、7-Eleven、梅西百货和百思买均已采用其广告技术。

两家待转换的客户中有一家来自竞争对手。CRI预计每个季度都会新增多个新客户标志，但并未对具体数量或财务贡献作出保证。

管理层表示，部署项目和SaaS客户数量的增加将使2027年的营收更具可预测性。公司还预计，布局的SaaS营收将从2027年1月1日左右开始带来高毛利的贡献。

对于计划在9月底前完成转换的待处理客户，CRI解释称无需进行新的安装。现有的硬件和播放器将远程迁移至CRI的CMS，潜在的新店和施工项目预计将在2027年进行。

CRI正在按月推进Culver's得来速的部署工作。该公司还在与另外七到八家彩票机构进行洽谈，而北卡罗来纳州彩票机构正在考虑在2027年进一步扩大合作。

业绩电话会议完整文字记录

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完整财报电话会议逐字稿

管理层陈述

Operator

Good morning. At this time, I would like to welcome everyone to Creative Realities' 2026 Second Quarter Earnings Conference Call. This call will be recorded, and a copy will be available on the company's website at cri.com following its completion. Creative Realities has prepared remarks summarizing the interim reports for the quarter, along with additional industry and company updates.

Joining the call today is Rick Mills, Chief Executive Officer; Tamra Koshewa, Chief Financial Officer; and George Sautter, Chief Strategy Officer and Head of Corporate Development. Ms. Koshewa, you may begin.

Tamra Koshewa

Thank you, and good morning, everyone. Welcome to our earnings call for the second quarter ended June 30, 2026.

I would like to take this opportunity to remind you that remarks today will include forward-looking statements. The words anticipated, will, believes, expects, intends, plans, estimates, projects, should, may, propose and similar expressions or the negative versions of such words or expressions as they relate to us, our management, our operations are intended to identify forward-looking statements. Actual results may differ materially from those contemplated by such statements. Factors that could cause these results to differ materially are set forth in our Form 10-K and other filings with the SEC. Any forward-looking statements that we make on this call are based on assumptions and information as of today, and we undertake no obligation to update these statements after today.

During this call, we will present both GAAP and non-GAAP financial measures. We believe the use of certain non-GAAP measures such as adjusted EBITDA, ARR and several other important key performance indicators represent meaningful ways to track our performance. A reconciliation of GAAP to certain non-GAAP measures is included in our public filings and in our earnings release that was issued this morning.

It is now my pleasure to introduce Rick Mills, CEO of Creative Realities. Rick?

Richard Mills

Thanks, Tamra. Good morning, everybody. We appreciate you joining today's call. I'll start by giving some highlights of our quarterly financials and other recent developments.

We posted revenue of $21.5 million in Q2 versus $13 million in the prior year period, including roughly $7.4 million from CDM. This is our best ever Q2 quarter revenue number and the second largest revenue quarter ever in the history of CRI. We are pleased with the strong top line growth and improved gross margins, which we expect this top line growth and margin enhancement to continue for the balance of the year. Our second quarter gross profit was $8.3 million as compared to $5.0 million in fiscal 2025 quarter, and our consolidated gross margin was 38.6% versus 38.5% in the prior year period. All trends are pointing in the right direction, and we believe we have tremendous upward momentum into the second half of the year.

As of June 30, we had an annual recurring run rate or ARR of $20.5 million, up from $20.1 million last quarter. And as we previously discussed, we have about 4 -- somewhere between $4 million and $5 million in backlog that will -- in backlog of ARR that will show up as we turn the clock and start 2027. So on January 1, that number automatically goes up significantly.

Net loss attributable to common shareholders was $4.6 million for the 3 months ended June 30, 2026, compared to a net loss of $1.8 million in the prior year period. Adjusted EBITDA rose to $2 million for the second quarter of 2026 versus $1.1 million last year. Our financial results are improving, and our team is putting in the hard work to increase operating efficiencies and leverage opportunities across our much larger technologically advanced customer-centric organization. We have now completed the majority of the integration with CDM.

We announced earlier this year, we expect to realize synergies of at least $10 million on an annualized basis. Currently, our run rate is approximately 75% of the total synergy number or approximately $7.5 million has been realized. This will help us to drive adjusted EBITDA margins in the quarters to come as we scale revenue. As we grow our adjusted EBITDA, we expect to use the free cash flow to further delever the balance sheet, as many of you know, exactly as we have done in the past.

The bottom line is we remain on track for the best year ever as we anticipate Q3 will be the largest quarter of revenue in the company's history. We expect Q3 this quarter to significantly exceed Q4 2025 when we achieved $23.9 million in revenue. And one other comment to note, we are also confident that Q4 will significantly exceed Q3 2026. So next 2 quarters, upward trajectory, tremendous growth.

One other thing, we recently completed a follow-on offering, raising approximately $12 million in net proceeds to help strengthen the balance sheet and provide capital for future growth. One additional note about the capital raise. I personally as the CEO, purchased 5% of the shares in the offering and several other members of the leadership team participated in the offering. Clearly, we believe in and are committed to growing this business. CRI is on track to be well positioned for the next 2 quarters and 2027.

I'll come back in a minute to talk about some customer updates, but we'll now turn it over to Tamra to share some additional comments on our second quarter financials. Tamra?

Tamra Koshewa

Thanks, Rick. An overview of our financial results for the second quarter of 2026 was provided in our earnings release filed this morning, which include the condensed consolidated balance sheet as of June 30, 2026, the statement of operations and cash flows for the 3 and 6 months ended June 30, 2026, and a detailed reconciliation of net income to EBITDA and adjusted EBITDA for the quarter ended June 30, 2026, as well as the preceding 4 quarters. We anticipate filing the Form 10-Q for the second quarter tomorrow. While Rick provided our operating results briefly, let me provide more context related to our performance and outlook.

Looking at the income statement, as Rick mentioned, second quarter sales rose to $21.5 million. This is an increase of $5.1 million compared to the first quarter and 65% higher than the same quarter in 2025. CDM contributed $7.4 million during the quarter or 35% of the total. Sales from our legacy CRI business increased approximately 8% year-over-year, driven by new installs across multiple new customers, including catching up on some of the installs that were delayed from Q1. Hardware sales rose to $7.5 million versus $7.1 million in the prior year period, reflecting both new deployments and the inclusion of CDM. Service revenue more than doubled to $14 million from $6 million in fiscal 2025, reflecting $7 million of CDM service sales and positive growth in the legacy CRI business from new installs.

Consolidated gross profit was $8.3 million in the second quarter of '26 versus $5 million in the prior year period, and consolidated gross margin was 38.6% versus 38.5% in the second quarter of '25. Gross margin on hardware revenue was 17.2% during the quarter as compared to 25.1% in the prior year period, while gross margin on services amounted to 50.1% versus 54.4% in the second quarter of '25. Hardware gross margins decreased year-over-year, primarily due to mix, while service gross margin declined due to the expiration of higher-margin customer contracts in '25. We anticipate gross margin to increase quarter-over-quarter as we realize sales growth from new business.

Sales and marketing expenses in the second quarter rose to $2 million versus $1.2 million in the prior year period, with CDM contributing approximately $500,000. General and administrative expenses were $9 million in the second quarter compared to $5.2 million in fiscal 2025, the increase driven by $3.8 million in CDM expenses during the quarter. Legacy CRI G&A expenses were down approximately $400,000 year-over-year. We remain on track to achieve the $10 million of synergies that Rick mentioned and cost reductions -- other cost reductions that have previously been announced for fiscal 2026, while also investing in the business to accelerate growth going forward.

We posted an operating loss of approximately $2.7 million in the second quarter of fiscal 2026 compared to an operating loss of $1.3 million in fiscal 2024 (sic) [ 2025 ], reflecting the items I just discussed. CRI reported a net loss of $4.2 million and a net loss attributable to common shareholders of $4.6 million or $0.43 per diluted share in the quarter ended June 30, 2026, versus a net loss of $1.8 million or $0.17 per diluted share in the prior year period. Adjusted EBITDA rose to $2 million in the second quarter of '26 as compared to $1.1 million in the prior year period and a loss of $494,000 in the first quarter. While adjusted EBITDA greatly improved over Q1 results, we continue to anticipate that it and associated cash flows will further improve during the second half of fiscal 2026, given the forecasted business growth and cost initiatives previously discussed.

In terms of the balance sheet, as of June 30, 2026, the company had cash on hand of approximately $10.7 million versus $1.6 million at the start of 2026. As Rick mentioned, we completed an equity offering that raised net proceeds of approximately $12 million to provide capital for growth and strengthen the balance sheet. Our debt stood at $46.6 million at the end of the second quarter as compared to $44 million at the beginning of the fiscal year. We had approximately $12.8 million of available liquidity under our revolving credit facility as of June 30, 2026.

We intend to use positive operating cash generation and the equity proceeds to support our growth projections, fund capital expenditures and lower our debt when possible. We remain dedicated to maintaining an optimized capital structure in support of financial flexibility. We believe given our recent capital raise and general positive outlook for the business, we are in a strong position to continue supporting this growth while strengthening the balance sheet.

One other item to mention. We provided a comprehensive financial model and corresponding documentation to our auditors in support of alleviating the going concern that has been on our financial statements for multiple periods. The auditors have reviewed our analysis and have concluded that the going concern is no longer needed. When our 10-Q is released tomorrow morning, the going concern language will not be there. We are confident in the plan we have laid out for the second half of 2026 and 2027 that models our ability to generate profitable growth and adequate cash flow and liquidity to sustain the business.

I will now turn it back to Rick for additional comments around customer activities.

Richard Mills

Thanks, Tamra. Great news about the removal of the going concern. Thanks for all the hard work.

Okay. Now some customer updates. I previously announced that we were selected as the official digital signage provider for the Tennessee Titans and the new Nissan Stadium under construction in Nashville, Tennessee. As a reminder, this is about an $8.5 million deal that includes the installation of thousands of displays in a full IPTV solution throughout the venue. We are on track for most of this revenue to be realized in 2026.

Additional perspective on the retail media network grocery client. I can now say that this new customer is Albertsons, an incredible brand, well-known company with thousands of locations across the U.S. To our knowledge, it is the largest retail media network being deployed in the United States this year. This is being measured by screen count. So why is Albertsons investing in this in-store media network? Why does in-store media networks work, right? Well, all the reasons we've discussed on prior calls, but in Albertsons, think along these lines, 2,200 stores, 20 well-known store banners in 35 states. Think of the names Albertsons, Safeway, Vons, Jewel-Osco, premium brands with locations all across the country. They get 36 million customers per week, which equates to 543 million annual customer trips. A tremendous network. We're thrilled to be part of it and excited. They use -- are using our entire AdTech stack, our CMS, all the things we talked about previously.

Another customer, AMC. As a reminder, on April 13, we announced a project to expand and modernize AMC Theatres' in-lobby media footprint across about 285 locations nationwide. This is a partnership between CRI and National CineMedia. They are the leading cinema advertising platform in the U.S. This media network utilizes our CMS platforms, again, including ReflectView and then our AdLogic, AdTech solution to provide ad serving for all the screens. We have completed the test locations and are moving to full deployment this month.

As we mentioned in the earnings press release, we are in the contract stage with two additional customers. One is a national cellular organization, which operates more than 900 retail locations across 45 states. The other is a fast-growing QSR, which today operates more than 1,000 restaurants across 22 states. Both customers are converting existing screens with plans for significant growth over the next few years. These conversions -- actually, one conversion will be completed by the end of September. The other conversion will be completed by the end of the year. They will help us grow our SaaS revenue in 2027.

One additional customer to talk about, we are in the process of migrating all of the Lexus, Toyota dealerships in Canada to our CMS platform. This engagement includes significant creative work to be delivered by our team. It includes approximately 300 locations, and it will generate a couple of hundred thousand a year in SaaS and creative services.

In closing, I want to take a moment and point out to everyone, our plans to go big, scale up and focus on the enterprise customer is working. We believe we have reached the stage where our profitability will grow quickly as we layer on additional business. Our sales pipeline is strong and most importantly, continues to grow significantly. The combined teams in the U.S. and Canada are working well together and frankly, delivering exceptional customer value. The reception from the customer to the new C -- combined CRI has been significant.

I want to do a quick shout-out to the new members of our C-suite who joined CRI in the last 7 months. Dan McAllister, Jackie Walker and Tamra on this call, they're all having a significant impact in the business. And as they take over the daily operations, and they truly are starting to run the business, I'm turning my focus on strategic growth areas in the marketplace where CRI will have an advantage over our much smaller competitors. Expect more to come in the future as I talk about that in future quarters.

With that, we'll now move to the Q&A portion of the call. Please go ahead, operator.

Operator

[Operator Instructions] Our first question will be coming from the line of Jason Kreyer of Craig-Hallum.

分析师问答

Jason Kreyer

Rick, great to hear all the deal flow that's happening. Particularly on the Albertsons front, good to hear things are moving in the right direction there. Can you maybe talk about what work, if any, has been done thus far? And then when you look at getting a big deal like that in the retail media sector, what does that do for prospects in the pipeline? Do you think that opens up more retail media opportunities? Or does that accelerate conversations you're already having?

Richard Mills

It certainly does. I'll come back to that, but I'll answer the first part of your question first. As of today, we have converted about 3,000 screens, and we're currently running 3,000 screens across 220 to 250 locations. We take over the deployment of those screens and the deployment of players and all the technology here over the next 30 days that will transition to us from -- they've had a plethora of suppliers doing it. It will all consolidate and we'll finish out the rest of Phase 1. So currently, today, they're running about 1 million ads a day, Jason. So it's very successful for them. They're excited. They're using our CMS, our AdTech, et cetera.

In terms of what it does for the pipeline, well, I got to tell you, it strengthens our position as we like to claim that we're one of the top 3 providers of retail media networks in the U.S. or North America today, the U.S. and Canada. And certainly, having a customer like Albertsons backs it up. We, again, have 3 or 4 customers today that have chosen our ad tech. You've got Albertsons, of course, 7-Eleven using our AdTech at now over 2,000 stores. Macy's, Best Buy has adopted our AdTech. So with growing references of that type of blue-chip brands, we expect that to accelerate our retail media network pipeline.

Jason Kreyer

That's great. We've also heard a lot about the challenges facing one of your competitors. It seems like that would create a great opportunity for CRI. Can you just talk about the early discussions that you're having with customers in the pipeline and what the prospects look like there?

Richard Mills

As I stated on the call earlier, Jason, I mean, again, here we have 2 customers who are in contracting stages right now, both have to be converted. One actually came from that competitor. The other was not. The other was a new -- came from a different platform. So we are gaining customers. We do expect the pipeline to -- was enhanced as that customer ran into some trouble or that other supplier, a competitor of ours, ran into trouble. So it certainly has helped our pipeline. But we do expect to be closing multiple "logos" on a quarterly basis, on a go-forward basis. So we're excited about it.

Jason Kreyer

Terrific. Last question for me. Just -- so given the deals that you've already won, the deployment pipeline you have today, if we combine that with the things that you have in your pipeline that you just alluded to, wondering if you can talk about how that changes your visibility as we look towards 2027 and gives you maybe a little bit better predictability around the financials.

Richard Mills

Certainly gives us better predictability because when you have 7, 8, 9 additional customers come on that are doing deployments or SaaS, if you will, on a consistent monthly basis. We think we have entered the new stage where our revenue as we enter 2027 will be much more predictable than it has in the past. We've been working on this for many years for this to catch up. And I would tell you that it's finally here. It's finally caught up or catching up, and we are incredibly bullish about 2027.

And I would also point out the comments I made earlier. We expect our Q3 to be the largest quarter in the company's history. Oh, by the way, we expect Q4 to be significantly larger than Q3. Well, that tells you there is pending revenue coming our way.

Operator

And our next question will come from the line of Brian Kinstlinger of Alliance Global Partners.

Richard Mills

Hey, Brian.

Operator

Brian, your line is open.

Richard Mills

Brian is never this quiet.

Brian Kinstlinger

Can you hear me?

Richard Mills

There you go.

Brian Kinstlinger

Hello?

Richard Mills

We hear you now, Brian.

Brian Kinstlinger

Interesting. I never hit mute, and I was on mute. Sorry about that. I was saying hi to you, Rick.

So on the strong awards and second half ramp in revenue, I'm curious with what's known, how you see the split between services and hardware.

Richard Mills

We see the SaaS continuing to grow from a services perspective, Brian. There is some hardware in the second half growth, but most of it is all services related which leads to, in theory, you should see the margin -- composite margin of the company increase in Q3, but even particularly Q4.

Brian Kinstlinger

Yes. Now that margin is improving on mix. Maybe you could touch on, there were a few comments on each of the pieces, the services and the hardware. Obviously, there's inflation, supply chain issues. How are you adjusting prices? Will we see margin recover at all in hardware specifically? And then on the service side, maybe speak to pricing trends.

Richard Mills

Pricing trends on the services, there's been some downward pressure, Brian, just due to when you have competitors suffering in the marketplace as they lose market share or their business falters, that tends to put pressure on price. We've been able to withstand that to a great extent, but it's always a challenge. In terms of hardware, we expect hardware margins to continue to be under pressure through the balance of this year, but we do expect in 2027 to get some additional relief in hardware margins. We believe we will expand them again in 2027.

Brian Kinstlinger

Got it. And just one more question, just to make sure I heard it right. One of your two pending negotiations or wins, it's August, and you expect to deliver by the end of September. Is it because you have the screens in inventory? I'm just trying to reconcile expecting to complete the installation that quickly.

Richard Mills

That one, is -- there is no installs, it's conversion of every one of their stores over to our platform. So they already have hardware in place. They already have players in place. We've developed scripts to go take over every one of their 1,000 locations "remotely," and it will deploy our CMS and all new content, and that literally will be done by the end of September. Now out of that customer in November, December, I then expect to pick up new builds and new construction, new store openings all throughout 2027, but there is no large hardware chunk that goes with the initial conversion. Makes sense, Brian?

Brian Kinstlinger

Totally. Great work on all the awards.

Richard Mills

Yes.

Tamra Koshewa

Brian, let me just clarify a couple of things that Rick was talking about with respect to your question on services versus hardware in the second half. We do expect that the third quarter is going to have a higher percentage of hardware revenues given the installs that we're planning for the third quarter, in particular, the Tennessee Titans. But then in the fourth quarter, we expect it to get back to the level that it was in Q2. And also because in the fourth quarter, remember, we have a large media revenue base that will come online that we will experience similar to what we did last year with the CDM media business.

Operator

And our next question will be coming from the line of Jon Hickman of Ladenburg.

Jon Hickman

On the margin side of things, is there some longer-term target gross margin that you are after that you could share with us?

Richard Mills

Jon, I think ideally, we'd like to, as we enter 2027, get back in -- out of the 30s back into the 40s. Tamra, I'll let you add comments, but just generally, we've had margin [ compression ] of 5% or 6%, and we're trying to get back as we enter 2027 through enhanced product mix, et cetera. Tamra, anything to add?

Tamra Koshewa

Yes, I think that's correct. I mean we have seen both the inflation as well as the mix of our revenues bring the margins down compared to last year. But as we build that SaaS base, then we can start to get back closer to that 40% plus target. But we're still going to be short of that this year. Certainly, in the second half, we'll see some improvements, but really not until 2027 when we get more of that SaaS revenue flowing through the P&L that we will start to get a lift on the margin rate.

Richard Mills

Yes. I would -- Jon, let me just add one more. I mean the point is, if you think to my earlier comments, we've got about $4 million -- certainly $3.5 million to $4 million of seeded SaaS already that is -- will "magically" turn on, on January 1. So that in itself brings incredibly high margin to the mix [indiscernible]. So that alone could push us up. We haven't done the math, pushes up the [indiscernible] up 2 points at the moment that turns on January 1. Go ahead and ask your question, sorry.

Jon Hickman

Okay. So if you have the kind of margins you would like in the, say, low 40% range, so you would need -- if you had that now, you would need another $6 million or so in revenues to breakeven on an operation basis. Do I have that -- does that math work out?

Tamra Koshewa

Yes, I think that's reasonable to assume.

Jon Hickman

Okay. Then any comments on Culver's and on the lottery stuff that's going on?

Richard Mills

Culver's continues to go well. We continue to deploy every month. We are installing new drive-thrus. There is, I think, a 3-year target to complete all of their restaurants. That's their target, not ours. And we are certainly well on track.

In terms of the lottery, we're seeing a lot of traction. We're in significant discussions with 7, 8 additional lotteries right now. North Carolina Lottery has talked about some significant expansion in 2027. I don't have orders today as we speak, but they continue to be extremely pleased and are looking to and continue to grow their lottery network in 2027. And we would expect to have some announcements as we get closer to year-end about a lottery expansion in 2027.

Operator

And our next question will be coming from the line of Kevin Sheldon, a private investor.

Unknown Attendee

Hello?

Richard Mills

Hey, Kevin.

Unknown Attendee

How are you, sir?

Richard Mills

Doing great. Yourself?

Unknown Attendee

All things considered, not bad.

Richard Mills

Go ahead.

Unknown Attendee

So just quick, when -- I guess it's a 2-part question or multiple, but regarding the SG&A being at $9 million, where do you need to be revenue-wise to be able to cover that? Or are there plans to improve efficiencies so that, that number isn't as large?

Richard Mills

It's really a combination of both. We expect the next 2 quarters to add significant ongoing revenue to the business that we will certainly be north of $25 million, closer to $30 million, if not exceed $30 million on a quarterly basis. We believe that's in the imminent future, Kevin.

Number two, there are -- we've taken out $7.5 million. It has not all showed up, but it's already been done. And so it will show up as we enter 2027. And we've got a couple of million of additional costs that we want to take out throughout 2027 as we migrate. We have customers on other networks, they're not running our software today. They're our customer, but they're running on third-party platforms that do cost us money. And the goal is to migrate them over to our platforms in 2027. So it's a combination of taking some SG&A out, leaving our expenses flat as the top line grows fairly significantly here over the next 3, 4 quarters.

Tamra Koshewa

And just one other thing I'd like to mention with respect to the G&A. What rolls in there is a fairly large amortization accounting expense for leases that we have in our mall network. And that amortization changes as we go throughout the year, and it's a noncash amortization that is just required for the way that we book that. So that certainly increases in certain periods of the year and then decreases back down. So it's not related to actual hard G&A costs that we can take out.

Richard Mills

Yes. Well said, Tamra.

Operator

And I would now like to turn the call back to Rick for closing remarks.

Richard Mills

Okay. I just do want to do a quick shout out. I want to give special thanks. There's about -- at CRI, we have about 230 employees now. I want to thank all of them for their incredible effort this year. I use the term what a great, sometimes crazy journey, this acquisition of CDM and putting the companies together and emerging as one of the top 3 competitors in North America. It's been pretty special. It's been fun, but we couldn't have done without the hard work of all the CRI employees. So a special shout-out to them.

So let me conclude the call by thanking all our shareholders, clients and partners for your continuing efforts, commitment and support as we work together to transform CRI into the leading brand in digital signage solutions. We look forward to speaking with you again next quarter. Thanks.

Operator

And this concludes today's conference call. Thank you for your participation. You may now disconnect.